The MEC Story: What Happens When a Brand gets a Second Chance

By Shannon Peel

Every brand has a story. The best ones start with a problem, a purpose, and people who care deeply about both. Mountain Equipment Co-op had all three. What happened next is a masterclass in what goes wrong when a brand drifts from its identity, and what it takes to find its way back.

This is not just a business story. It is a brand story, and a complicated one.

MEC was Born in a Tent on Mount Baker

In 1970, a group of Vancouver climbers were pinned down by a storm on Mount Baker. Stuck in their tents with nothing to do but talk, they landed on an idea that would define Canadian outdoor culture for the next five decades. They were tired of driving from Vancouver to Seattle just to buy decent climbing gear. So they decided to build something better, closer to home.

Back in Vancouver, they founded Mountain Equipment Co-op as a consumer cooperative with an unlimited number of equal membership shares. The first catalogue was a single typed page taped to a door at the UBC Student Union Building. By the end of the first year, membership reached 250. By 2017, the co-op had five million members.

That is not a marketing story. That is a movement.

For nearly five decades, MEC was not just where Canadians bought their gear. It was where they felt something. For $5, you became a member and part-owner of the co-op. The brand was built on democratic membership, environmental stewardship, and social responsibility. It was the outdoor community's home base.

Then it got complicated.

The Slow Drift: When Did MEC Lose the Plot?

The brand drift happened in two distinct waves, and the early warning signs were visible long before the financial collapse.

The first wave came in the late 1990s, when MEC began carrying kayaks, canoes, and bicycles. Some early members were already upset. But the reasoning was still defensible, members couldn't access those products easily, and the co-op was responding to member need. That framing kept it coherent with the co-op's purpose.

The second, more damaging wave came around 2010. According to Kevin Harding, a public policy professional who was at the centre of the 2020 campaign to save the co-op, this was when the organization made a subtle but fundamental shift: away from "what do our members need" and toward "how many members do we need to grow our business?" It sounds like a small distinction. It wasn't.

By 2011, the Globe and Mail was already reporting that MEC was in the middle of a full strategic rethink — adding more colours and lifestyle apparel, moving toward a broader urban clientele, pulling back from its hard-core backcountry identity. The story at the time described MEC's CEO attempting to "carefully stoke change in the co-op's culture" while retaining its "core philosophy". In hindsight, the core philosophy didn't survive the stoke.

In 2012, MEC announced it was adding 1,400 new products to its stores. It opened a "stunning" new headquarters in Vancouver and expanded into smaller Canadian markets. At the same time, it quietly dropped the word "co-op" from its marketing and adopted a bylaw giving the board the power to disqualify board candidates it felt weren't qualified for the role. According to research published in The Conversation (2020), MEC's financial risk ratio, the measure of liabilities relative to member equity, was low and stable until 2012, and then started climbing steadily, reaching near 100 per cent by 2018–19.

The expansion strategy drove the debt. The governance changes removed the members who might have stopped it.

The MEC Leadership Problem

MEC made a leadership mistake that researchers have identified as a classic pattern in the failure of large co-operatives. As The Conversation noted in 2020, MEC "built a leadership team that lacked any obvious understanding of co-operatives and fostered a culture that started to see member involvement as a problem rather than a strength." The board justified its new candidate-screening rules by arguing it needed directors with experience running large companies, but in doing so, it traded democratic legitimacy for corporate credentials.

David Labistour, CEO from 2008 to 2019, had genuine retail experience, Adidas, Marks & Spencer's South African affiliate, Aritzia and grew membership from 2.7 to 5.1 million during his tenure. He was widely respected. But his vision was to modernize and broaden MEC, not deepen its co-op identity. Under his leadership, MEC rebranded in 2012, dropped the co-op from its name, and began competing for a demographic it had never been built to serve.

When Labistour stepped down in 2019, the board hired Philippe Arrata from Best Buy Canada, where he had been Chief Financial and Administrative Officer. Arrata's mandate was explicit: turn around a business that had posted an $11.5 million loss on $462 million in sales in fiscal year ending February 2019 (Globe and Mail, 2019). He had served on MEC's board from 2015 and had already developed views about co-operative governance, specifically, that board members weren't selected for expertise the way public company directors are. He was a financial turnaround specialist. He was not an outdoor retailer. He was not a co-op specialist.

Arrata had developed a turnaround plan and early results were improving when COVID-19 arrived and revenue fell off a cliff, down 50 per cent initially. MEC's financing facility from a syndicate led by Royal Bank of Canada expired in August 2020. The bank didn't renew. On September 10, 2020, MEC filed for creditor protection.

The Sale That Broke Canadian Hearts

On September 14, 2020, the board announced unanimously that it had sold MEC's assets to Kingswood Capital Management, a Los Angeles-based private equity firm, in a deal valued at C$120 million. No members were consulted. No warning was given.

The reaction was immediate, visceral, and deeply personal.

A Change.org petition called "Save MEC" gathered more than 138,000 signatures within days. The campaign raised over $100,000 to fund a legal challenge. Sara Golling, one of the original founders of MEC, called CBC Radio and said: "I'm feeling grief and betrayal. MEC was a co-op, and one of the co-operative principles is democratic member control. The members were never consulted about this. We were never warned just how bad conditions were for MEC. We weren't given any voice at all in what happened". She also identified what she believed was the core error: "I think one of the errors that MEC made was going for excessive growth."

As early as March 2012, 379 member-owners had signed a letter demanding the board reverse its new bylaw changes, calling them undemocratic. The erosion of member voice had been building for eight years before the sale. By the time of the announcement, the infrastructure for democratic resistance had already been dismantled.

André Beaudry, Director General of Co-operatives and Mutuals Canada, raised a legal concern that went beyond MEC: "For 49 years MEC was a co-operative. In the B.C. Co-op Association's legislation and in MEC's own bylaws it was very clear that members needed to be consulted before a partial or total sale of assets. Can a process like this now move forward in other co-operatives in Canada where the members aren't consulted?".

The Save MEC campaign came remarkably close to succeeding, pulling together tens of thousands of people and attracting advice from large co-operative financial institutions, but was stopped by the legal system

On October 30, 2020, Kingswood Capital Management completed its acquisition of substantially all of MEC's assets. The co-op's 49-year run as a member-owned organization was over.

What Kingswood Got Right and What It Missed

Kingswood Capital Management was founded by Alex Wolf, whose background was entirely in leveraged finance and private equity, Ares Management, Cerberus Capital Management, Wells Fargo. No retail experience. No Canadian background. No outdoor industry experience.

They were smart enough to know what they didn't know. They created a Canadian affiliate and appointed Eric Claus, a Canadian retail veteran with more than 30 years of experience including CEO roles at Co-Op Atlantic, A&P, and Save-A-Lot, to run the business day-to-day. Claus was a longstanding MEC member and brought operational discipline the co-op had never had.

The results were real. Changes made immediately included ending the practice of returning seasonal merchandise to warehouses and instead using markdowns to clear it, redesigning store manager bonuses, moving out of the oversized headquarters, renegotiating store leases, and laying off approximately 100 head office staff. Claus confirmed they were cash-flow positive from day one of Kingswood ownership, even through a pandemic.

Kingswood also benefited from a tailwind it didn't create: Canadians were buying record-breaking quantities of outdoor goods following store shutdowns and the international travel ban, with bicycles and camping gear seeing strong sales through 2020–2022. Revenue recovered to approximately $402 million in 2021 with EBITDA of $29.9 million, and held near that level through 2022 with EBITDA of $32.5 million. In October 2021, MEC brought the mountain back to its logo. By 2023, MEC topped the Gustavson Brand Trust Index.

But operational efficiency is not a brand strategy.

Kingswood's own self-description of its investment approach is "complex turnarounds," deploying an "operations-heavy approach to quickly create value" before exit. They had a stated five-year timeline. Former MEC employee and industry observer Gord Patzer described the model plainly: Kingswood wanted to make the business more profitable and flip it to a new owner, "It's similar to the way people buy run-down houses, do a cheap reno, then sell them for way more, but with an outdoor retail company".

Revenue began declining in 2023. A confidential Kroll Corporate Finance presentation prepared for prospective buyers in summer 2024 forecast revenue of $361 million for fiscal year ending February 2025, with EBITDA of just $6.4 million, down from $32.5 million in 2022. Multiple suppliers launched lawsuits over unpaid invoices. Lever Style Ltd. filed the largest, seeking more than $1.3 million. Kingswood put MEC back on the market.

Three forces hit simultaneously. The post-pandemic outdoor boom reversed across the industry: REI reported a net loss of more than $156 million in 2024 and began closing stores. Decathlon, with 1,700 stores in 70 countries, had opened 20 stores across Canada, focusing on entry-level products at low prices. And McKinsey projected an annual decline of approximately 6 per cent in the sporting goods industry between 2024 and 2029, driven by consumers pulling back on discretionary spending as inflation persisted.

Kingswood stabilized a business in genuine freefall. What they couldn't do, or didn't try to do, was rebuild what had made MEC matter in the first place.

Coming Home to Canadian Ownership

On May 16, 2025, Mountain Equipment Company was acquired by a group of private Canadian investors led by Tim Gu, a manufacturing executive with deep roots in Canadian retail, apparel, and investment, and a stakeholder in heritage brands including Tilley and Roots. MEC's CEO Peter Hlynsky and Chief Merchandising Officer Chris Speyer both joined the ownership group, making it a partial management buyout. Speyer told CBC News: "It's a profound moment, you know, where Canadians are more aware of their identity and their sovereignty than ever before."

The timing was not accidental. The acquisition closed against a backdrop of the Canada-U.S. trade war, with Canadian consumers actively redirecting spending toward domestic brands. Speyer confirmed the immediate consumer response: "This weekend, we really heard from Canadians that, at this juncture in history, MEC being a Canadian-owned company matters a lot. Canadians want to buy Canadian."

Hlynsky, in an interview with Retail Insider, described the ownership change's meaning directly: "I think our timing was perfect. The Canadian ownership message has a lot more meaning right now. Canadians are focused on buying locally, supporting homegrown brands, and reconnecting with what makes this country unique".

Kingswood retained a minority interest.

MEC Back to Core, Not Back to Co-op

The new owners have been clear about two things: MEC is not returning to co-operative structure, and it is returning to its outdoor core.

Speyer, who spent seven years at REI before joining MEC, has focused on what he calls "doubling down on fundamentals" the core activities of camping, hiking, climbing, and backpacking, alongside expanded partnerships with key vendors like Arc'teryx and Black Diamond.

The strategic questions Speyer is asking are revealing: "How do we show up through the people working the floor and double down on their expertise? How do we curate meaningful assortments for camping, hiking, climbing, backpacking? How do we act as a gathering place for the outdoor community and demonstrate our values in protecting outdoor spaces?"

On MEC Label products, Speyer told the Globe and Mail: "We hope you're investing in equipment that lasts 25 years. It's about understanding the value of quality." MEC Label tents are positioned at $200 less than comparable brand equivalents, with the explicit goal of making the outdoors more accessible.

The yoga mats and fashion-adjacent activewear era appears to be over. Local relevance is also built into the strategy. Speyer noted: "There are very different ways people recreate in Quebec, in Vancouver, in Halifax. We want to double down on that local relevancy, so we can show up in a way that makes sense for each community."

Tim Gu's manufacturing background adds a Made-in-Canada dimension that directly echoes the co-op's original character. His E.star International facility manufactures for Canada Goose and others, and the plan is to grow MEC Label's penetration of domestically produced product, a direct answer to Sara Golling's 1970s co-op, which originally sold tents made by members themselves.

The Numbers and the Outlook

Speyer confirmed six consecutive months of positive comparable sales growth leading into the May 2025 ownership change. "That is a reflection of the fact that when we just focus on our fundamentals around being a great outdoor specialty retailer, the member and the customer will show up," he said.

The renewed emphasis on core outdoor activities "coincided with a successful winter season." Speyer acknowledged the snow drought in the western U.S. hurt many retailers south of the border; MEC appeared to benefit from Canadians staying home and recreating locally.

Expansion is proceeding carefully. A new Nanaimo, B.C. store opened in December 2025. MEC relaunched its Laval, Quebec location following a complete remerchandising and staffing upgrade, a model for how existing stores can be revitalized without requiring new real estate. Hlynsky described the Laval approach as "a gateway to the outdoors, similar to what North Vancouver is to Vancouver."

MEC is also moving its head office above its flagship Vancouver store at Olympic Village in early 2026, bringing design, development, and operations teams together under one roof for the first time. "Designers will be able to go down to the sales floor, talk directly to members, and see how products perform in real time," Hlynsky said.

The broader sector context remains difficult. REI, Orvis, Eddie Bauer, and numerous other outdoor retailers are contracting. MEC is one of the few in the sector that is currently expanding. Whether that reflects a genuine recovery or the early stages of another overreach will take time to determine.

Is the Community Coming Back?

The co-op community, in the formal, democratic, member-owned sense, is gone, and the new owners have not suggested otherwise.

What is being rebuilt is different: a community of customers, connected through shared values, shared activities, and shared physical spaces. The Vancouver flagship's bouldering wall, gear rentals, and community events have drawn visible queues of customers, the photograph that accompanied Retail Insider's October 2025 story showed a line outside the store for a community event.

Sara Golling's grief in 2020 was for something specific: the democratic structure that gave members a genuine voice in how the organization was run. No retail company, however purpose-driven, can replicate that. But a brand that consistently lives its values, employs people who actually use the gear, builds stores that function as community gathering places, and manufactures products that make the outdoors more accessible, that brand can earn a different kind of loyalty.

As Denise Cole of the Toronto ad agency Juliet Creative observed in 2020 when the Kingswood sale was announced: "A brand is certainly only as valuable as people's belief in it, in what it stands for. MEC is built on a foundation of community, and upsetting that community could do major damage to its value".

What the new owners appear to understand, and what the previous decade of leadership demonstrably did not, is that MEC's community was never a customer base to be grown. It was the reason the business existed at all.

Whether they can hold that understanding through the pressures of a difficult retail environment, vendor relationships that still need rebuilding, and the temptation of growth targets, that is the question the next five years will answer.

What This Brand Story Teaches Us

MEC's journey spans more than five decades and touches nearly every mistake a brand can make and every grace that can pull it back.

The co-op did not fail because it ran out of money. It failed because it lost its sense of purpose. It started out serving a specific community of outdoor enthusiasts and slowly drifted toward serving everyone, which in practice meant serving no one particularly well. The governance changes that removed member voice starting in 2012 didn't just erode democracy. They removed the feedback mechanism that would have told leadership it was going in the wrong direction.

Kingswood did what private equity does well: it brought financial discipline to an operationally chaotic business, removed debt through the CCAA process, and produced profitable years. What it couldn't do was understand, or perhaps genuinely didn't need to understand, why five million people cared so much about a gear store that they signed petitions, raised $100,000 in days, and used the word "grief" to describe losing it.

The 2025 sale to Canadian investors matters not simply because of the symbolism of Canadian ownership. It matters because the people who walked in carried the right story: long-term thinking, local manufacturing, community connection, genuine belief in the brand's purpose.

When 138,000 people sign a petition to save a retailer. When a founding member calls a radio station to say she feels betrayed. When store employees draw Kübler-Ross grief curves on flip charts. You are not dealing with a retail brand. You are dealing with something that lives in people's identities.

That kind of brand equity is extraordinarily rare. Losing it takes years of small decisions. Rebuilding it takes something harder to manufacture than a marketing campaign: the consistent, daily decision to be exactly what you said you were.

MEC's brand survived being sold to a U.S. private equity firm. It survived the end of its co-op structure. It survived vendor lawsuits and two sale processes and years of financial turbulence. It survived because the story it was built on — community, purpose, the outdoors, being Canadian, was stronger than the management that misread it.

The question for Tim Gu, Peter Hlynsky, and Chris Speyer is simple:

Do you know what the story is?

And are you willing to live it every single day?

So far, it looks like the answer is yes.

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Shannon Peel is a Brand Narrative and Communications Strategist. She builds strategic brand storytelling ecosystems that help businesses, executives, and thought leaders earn authority, credibility, and citations across the digital landscape.